Top 5 Mistakes Landlords Make with Their Investment Properties

1Managing an investment property is no easy task. It may sound like big money, but if you are not prepared it can turn into a huge money pit. As a landlord, you have a big responsibility to the property as well as the tenants. One small misstep could end up costing you valuable time, energy, and money. That is why you must make sure you do your homework before jumping in. Do as much research as possible. If you look up the latest real estate trends in the area or ask a local expert, you will be able to find enough information to help you make the best decisions when it comes to your investment property. Unfortunately, many landlords want to get started so quickly that they do not think before they invest. Here are the top five mistakes that landlords make with their investment properties:

1.Choosing the Wrong Tenants

This is one of the biggest mistakes you can make as a landlord. If you are renting your property out to a stranger, you must take the extra steps needed to make sure you get the best possible tenants in your property. If you do not know them very well, there are certain precautions you can take. Have them prepare the following:

a) Application Form: Have prospective tenants complete a written application form. This will include standard renter’s information such as names, numbers, employer, previous residences, income, etc. Each adult who will be living in the property would need to fill one of these forms out and minors can be added as well. They would sign that all the information they provide is accurate to the best of their knowledge.

b) Credit and Background Checks: Tenant screening is a great way to see how financially stable your prospective renter is. Credit reports often show if someone has been late on payments and the amount of debt they already have. A background check is very important, not just for your peace of mind, but also in consideration of the neighborhood. You would not want to rent the property out to a convicted criminal. It would compromise the safety of the area and could also bring down the property values.

c) Referrals: Asking for referrals from past landlords and current employer is a great way to go the extra mile in finding the perfect tenant. If the applicants have not be great renters in the past, then they probably would not move forward with their application if referrals are needed. A referral from an employer would also give you confidence that the tenant is gainfullyemployed and able to make a monthly payment.

2. Failing to Create a Thorough Lease Agreement

Creating a good lease agreement is where part of your research will come in handy. Many landlords will print the first form they see on the internet. Unfortunately, this form could be outdated and only relevant for a certain location. Make sure to find an application that has all your stipulations and current local regulations spelled out. Some tenants will comb through the entirety of the agreement to try to catch something that the landlord missed to exploit it. For this reason, it is very important that you create a thorough lease agreement. Be sure to add any rules specific to your property in an addendums section.

3. Lack of Communication

If you make yourself unavailable to your tenants, you are doing them and yourself a disservice. Your office should always be open and you should always be available by phone. Sometimes, home emergencies will come up and your tenants will need your ‘okay’ or your help to get the issues resolved. It can range from something small, like a door coming off its hinges, to something huge, like a flood or leak in the plumbing. The sooner you can get back to your tenants, the better for them and you. The longer you let an issue go, the more difficult it will be to fix a problem and the more resentment your renter could have for you. You want to make sure that your tenants have a good experience so that they are not criticalof you to future renters. This is especially important this day and age where you can review anything and anyone on the internet.

4. Setting the Rental Rate Too Low or Too High

Make sure you are setting the rental rate within the correct range for the property’s age and location. There is such a thing as setting the price too high and too low. If the rent is too high for the area or for how old the property is, no one will want to live there. The longer your home sits unoccupied, the more money you are losing each day. In the same vein, you do not want to set the rent too low. You may be able to get someone into the home quicker, but you could be leaving a lot of money on the table. The whole point in taking on an investment property is to make money. The best thing you can do is look at other rental properties in the area. Try to stick within the range of rental pricing you see in the neighborhood.

5. Delaying Eviction Process

If you do find yourself in the position of having to evict a tenant, try to get the process started as soon as possible. You can expect it to take about 30 days from start to finish, but many times, it is delayed because tenants will come up with excuses. As soon as you can tell there is a real issue, you should begin the process. The longer you wait to get it rolling, the longer it will take. The longer it takes, the more money you will be losing. It is important to note that the tenant is still legally obligated to pay the back rent owed to you. However, if a tenant has opted not to pay rent up until this point, you may be out of luck trying to collect it from them in the future.

Being a landlord is a tough role! If you avoid these common mistakes that most people make with their investment properties, you should have an easier go at it. The main thing to remember is that the more research and preparation you put into renting out your property, the more return you will see on your investment.

Source: realtybiznews.com

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Is an Evicted Tenant Still Liable for Rent on the Remaining Months of a Lease?

ask-the-attorneyThe Landlord Protection Agency®presents John Reno, Esq.,a highly experienced Landlord – Tenant attorney based on Long Island, NY.

Q:  Dear Mr. Reno:

Thank you Mr Reno for taking my question. Once an eviction takes place, what is the status of the Lease Agreement as it pertains to lost rent? Is the evicted tenant still liable for lost rent for the remaining months of the Lease?
Charles, California.

A: Yes, yes, yes, the tenant is liable for the remaining months- but there’s a catch: Once you re-rent, you no longer can claim damages for lost rent. So you have to wait until you re-rent so you know how much to sue for.

Legal Disclaimer
The Landlord Protection Agency’s “Ask the Attorney” column is for informational purposes only. The questions answered by Mr. Reno on this site do not constitute an attorney – client relationship and are not to be considered legal advice. Not all questions will be answered and some may appear in the LPA Q&A Forum.
The Landlord Protection Agency recommends that you seek legal advice before using any of the material offered on this web site, and makes no guarantee on the effectiveness, compliance with local laws or success of any of the material offered on this web site. The Landlord Protection Agency is not engaged in rendering legal advice.

13 easy ways to stay on your property manager’s good side

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Property managers would be lying if they’ve never had times where relationships with tenants have broken down. But it doesn’t have to be that way.

Our friendly team sees your happiness and comfort as a priority — it’s just as important to us as keeping our landlords happy.

So forget previous bad experiences, harsh landlords or unreasonable property managers. We’re extending the olive branch and starting again — these 13 tips will help you understand what we expect from you and why relationships can sometimes become strained. Help us out with these aspects and we’ll get on fabulously. Plus, we’ll be able to give you a great reference when you decide to move on from your current property.

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1. Pay rent on time.

We know this seems obvious, but you’d be surprised how many tenants pay rent late. Want to stay on our (and your landlord’s) good side? The easiest way is to set up a direct debit and pay rent on time every month!

 

2. Be polite.

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Being polite and calm really does go a long way and we’ll always respond with the utmost courtesy too. After all, we’re at work and we want to represent our company in the best way possible. Do some property management companies suck? Absolutely.  But why would anyone want to go above and beyond for someone who is just going to yell or be impolite? When an issue seems to linger, try to see our viewpoint — we’re dealing with hundreds of tenants and landlords which require us to prioritize the urgency of each issue. Often we are addressing the issue, but simply waiting for your landlords response, approval, or payment or waiting for an opening in the maintenance contractors schedule. Honestly, we’re doing our best and also want to get things resolved as quickly as possible! A little bit of kindness and understanding will help you get the resolution you require quicker.

 

3. Listen to our instructions.

You might not believe it, but we know a thing or two about houses! Watch and listen when we show you how to trip a beaker or turn a gas valve off. Everything we say is to make your life easier and our job smoother.

 

4. Be our eyes and ears.

We have to take care of many properties and we won’t know about any problems or issues if you don’t tell us. The earlier you can inform us of a problem, the quicker we can sort it and the less likely it is to escalate.

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5. Tell the truth.

Lease terms can be forgotten or accidents can happen — we understand that kids, friends and even you can make mistakes, and telling us the truth will help us get the problem resolved as soon as possible. After many years in the business, we’ve heard all excuses and we can spot a lie a mile off.

 

 

6. Leave a message.

On the rare occasion we don’t answer your call, please leave us a message, drop us a text, or send us a quick email rather than calling again and again. We may be in a meeting, at a showing appointment, on the phone, or with other clients and unable to answer at the time. We we will respond back as soon as possible.

 

7. Understand we have a lot going on.

Just like everyone at work, we need to prioritize our workload around the urgency of each issue. If we can’t deal with your problem immediately, it doesn’t mean we don’t care — it may just be that someone else has something bigger we need to worry about. We’ll communicate with you as much as possible, so you know why we may be delayed in sorting your problem out.

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8. If you get in a bind, talk to us.

Did you lose your job? Has your flatmate gone off the deep end? We want to know what’s going on and we want to help — don’t think you’ll be in trouble! It won’t help if you put your head in the sand and hope whatever problem you have will go away. Speak to us and we’ll help you address it and get out of any sticky situation. Communication is key!

 

9. Treat the property and the people who do work for us with respect.

We love knowing that our tenants are looking after our properties — a clean tidy damage-free house at inspection time is a sure fire way to get into our good books. And there’s nothing better than hearing from an electrician, plumber or other trades-person that they encountered a lovely tenant.

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10. Work with us.

You have a busy schedule, we have a busy schedule — let’s work together and make everyone’s lives easier. Trust us, we want your problem resolved because we have a dozen more to deal with! Where you can, work with us on times and arrangements. We hate to disturb you but we’ll be done and out of your hair as soon as possible.

 

11. Trust us.

We only ever want to enter your home for a legitimate reason upon prior approval from you — we’re not going to steal your stuff or mess with your things! We have our reputation and real estate licenses on the line.

 

12. Follow the rules.

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We don’t set rules, we’re simply paid to enforce them. Each state has Landlord-Tenant Laws designed to protect the rights of both parties in the lease: the landlord and the tenant. The terms of the lease are not merely made-up by the property manager, but rather established and enforced by the state’s Landlord-Tenant Laws. The state governs when rent is due, when late fees are assessed and what amount to charge, how much notice to give before moving, a landlord’s and tenant’s responsibilities, among others. The lease constitutes a contract. When you sign a contract, you agree to all those rules, so don’t ignore them once you’ve moved in. Good tenants and good landlords respect contracts, and good property managers enforce them. After all, it’s our job to return a landlord’s property to them after a tenancy in the same way it began.

 

13. Respect your neighbors.

Try and put yourself in your neighbor’s shoes — would you appreciate a loud party the night before your final exams or a major presentation at work? No, you wouldn’t! Respecting others is a key part of living on your own so be as considerate as you can and, if you mess up, an apology can go a long way.

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With a little give and take, we can keep our relationship strong and you can have a much more enjoyable and relaxing time in your rental home. We know we’re not always perfect, but we’re just doing our job as best we can.

Source: Harcourts

12 “Sure” Deal Breakers When Screening a Prospective Tenant

1If you are a discriminating landlord, you surely have a number of conditions on which you will disqualify a prospective tenant. As long as you discriminate legally, and not against any fair housing laws, we may share the same “Deal Breakers” below. Some of these can go either way, depending on the needs of the landlord. Please let us know if you have any “sure deal-breakers” not listed.

  1. Bankruptcy
    Do you know what a person has to go through before deciding to declare bankruptcy? It can sometimes be years of dodging creditors and bill collectors. It is a process that teaches an individual how to get around paying creditors. It is not a pleasant experience, and it usually educates and hardens a person towards all creditors.
    I don’t mean to say people who have gone bankrupt are not nice people or will not be good tenants!I mean to say that I prefer not to rent to people who are not afraid to damage their already damaged credit.

 

  1. Prior Eviction
    Any tenant who has been evicted probably has very bad credit and may feel confident in gaining a few months free rent in an eviction should the need arise.

 

  1. Criminal History
    I’ve been asked by a few landlords, “Am I allowed to discriminate against someone with a criminal history?” Of course you can! Yes, it is legal to decline an applicant because they have a criminal record.
    It may notbe politically correct to decline criminals, but Criminals are not a protected class…. Yet. Obviously, you need to use your common sense on this. A DUI or speeding ticket, for instance doesn’t necessarily make someone a bad tenant, while a conviction for domestic violence could be more of a warning sign.

 

  1. No Money
    Are you a landlord who needs to collect the rent? Or are you a charity who takes in unfortunates who don’t have all the required move-in money?
    If you want to survive in the landlord business, you need tenants who can afford to move in and pay the rent every month.
    It is a major RED FLAG when a prospect is unable to provide you with the necessary security deposit and rent. I am amazed at how many landlords allow tenants to move in without first collecting the rent and a deposit!

 

  1. Bad Credit
    What is the purpose of running a credit report on a prospective tenant? You’d be surprised at how many landlords run credit reports that come up BAD and still accept the applicant anyway. For me, bad credit history is a sure denial. Otherwise, why bother running a credit report? Needless to say, credit history is often indicative of how your rent will be paid.

 

  1. Tenant Unable or Unwilling to provide satisfactory references
    If they’re not willing or able to comply with your rental application, why in the world would you expect them to follow the rules of your lease?

 

  1. Tenant unwilling to agree with your lease
    That’s a no-brainer. DECLINED!
    I am surprised at how many landlords are willing to sacrifice important landlord protection lease clauses simply because the tenant wants them to. Of course, you need to to be sensitive to the tenant’s needs, and weigh certain arguments on a case by case basis.

 

  1. Bad Attitude
    That’s a no-brainer. DECLINED!

 

  1. Alcohol and/or Drug Problem 
    I know you want to be fair and help people, but steer clear of these kinds of problems, especially when they are obvious. You are looking for a responsible tenant who you can rely on.

 

  1. Smoking
    This is a judgment call. I try to keep my properties smoke free whenever possible. I find it is difficult to rent a unit to non-smokers that had smokers in it before. Rental re-prep involves a vacancy and is usually more painting and cleaning, and still may not eliminate the odor.

 

  1. Pets
    This is also a judgment call. I try to keep my properties pet free. I learned that it can be difficult to rent after a pet was there, for allergy reasons, odors, etc. Rental re-prep usually includes more painting and cleaning and often new carpeting, and still may not eliminate all the odors.
    On occasion when I have great applicants and have inspected the previous home and the pet, I may make an exception, but I am still reminded of the immortal words of my landlord mentor, Nick Koon: “No dog every improved the value of a rental property.

 

  1. Tenant Unable or Unwilling to see the rental personally or meet landlord before application being accepted
    Big RED FLAG. Do a search of “Scams” in the LPA Landlord Q&A Forum.
    Even if the tenant is legit, you should not be deprived of the right to do a proper screening, including the opportunity to meet the prospect so you can decide if you will be comfortable renting to him or her.

About the author:
As a Real Estate broker / investor in New York, John Nuzzolese has been involved with rentals and investment property since 1979. Besides owning and operating two real estate businesses, he is president and founder of The Landlord Protection Agency, Inc. , an organization specializing in helping landlords and property managers avoid the hurdles and pitfalls and expensive blunders common when dealing with tenants.

More information on The Landlord Protection Agency is available at www.theLPA.com

 

FORBES: Eight Reasons You Shouldn’t Manage Your Own Investment Properties

1Purchasing an investment property is an exciting business venture. If your building is in good shape and you find the right tenants, you stand to earn a lot of money from your rental units.

At first it may seem like a good idea to manage your own property and retain full control over costs, tenants and income. However, self-management can often be a headache: When something breaks down or your tenants are late with rent, you bear the sole responsibility to address it.

Hiring a third-party property management company can be worth every penny, especially if you’re looking to grow your investment business over time. Members of Forbes Real Estate Council shared eight common scenarios in which it makes more sense to outsource your property management tasks.

1. If Real Estate Investing Is Your Side Hustle

If an investor has a full-time job and they are investing as a side hustle, I would suggest hiring a property manager from day one. If the investor is fully focused on real estate investing, it makes sense to bring in a third party once they reach 10 units. At that point, their time is better used looking at more deals versus collecting rents or dealing with tenant maintenance issues. – Ali Jamal, Stablegold Hospitality

2. If You Lack Housing Expertise

Investors should not manage their own properties in situations where they are not familiar with the type of housing being managed. For example, with affordable housing, there is much compliance involved and making a mistake can result in fines. In that scenario, property management is best left to third-party companies that specialize in affordable housing. – Nathaniel Kunes, AppFolio Inc.

3. If You Want To Maximize Your Time As A Passive Investor

Your time is valuable, and technology is opening up many outsourcing options by connecting investors with qualified professionals in property management and skilled labor. Take advantage of every opportunity to maximize yourtime. In fact, investment platforms are allowing people to diversify across several properties without ever picking up a hammer. – Nav Athwal, RealtyShares

4. If You Need To Fill In Skill Or Resource Gaps

Each investor’s access to resources and prior skills and knowledge needs to be reviewed before providing this type of recommendation. It needs to be personalized. An investor who is a handyman likely doesn’t need to pay someone to make repairs. Finding the right tenant can make or break success, so evaluating candidates may be the best area to have help, particularly at first. – Michelle Ames, HorsePower Team Texas/Independent Realty

5. If You Don’t Have Time To Learn The Laws And Run It As A Business

Outsourcing will avoid legal liabilities from Fair Housing and Fair Credit Reporting Acts, state landlord-tenant laws and local regulations. Property managers will have resources that can perform services for less. You’ll also be less likely to lose income from tenants who don’t pay their rent or rents that end up being below market. – Alex Hemani, ALNA Companies

6. If Your Properties Are Located In Different Markets

Using third-party management is usually advisable when properties are located in different markets, as well as when owners don’t have the time or skills required to manage the property effectively. While it is tempting to save the 7-8% management fee typically paid to property managers, there are a host of tasks they take care of to keep the property occupied, cash-flowing and maintained. – Gary Beasley, Roofstock

7. If You’re New To Being A Landlord

You should hire a third-party manager if you’re new to being a landlord and don’t completely understand local ordinances and leasing practices, or don’t have all the contacts needed for repairs and maintenance items. A good third-party manager will know all of the above and you will learn them over time. – Lee Kiser, Kiser Group

8. If You Want To Scale Your Investment Business

If you want a large income property portfolio, don’t self-manage beyond one to two years. After that time, you will be better able to understand “a manager’s perspective.” Your highest and best use isn’t faucet repair or replacing bathrooms. It’s researching geographic markets and establishing competent teams. If you self-manage, ask yourself better questions like, “How scalable is this?” – Keith Weinhold, Get Rich Education

Source: forbes.com

Abandonment of Rental Property

bill-new-100What to Do if a Tenant Abandons the Property


by Attorney William BronchickLegalwiz.com

Have you ever had a tenant leave in the middle of the night or the middle of an eviction?  Did you ever wonder what to do?

Basically when a tenant abandons the property, you do not need to file an eviction or wait for the sheriff.  You can change the locks.  As for the tenant’s stuff, in most states you can simply toss it.  You should check your state or local law to see what your legal obligation is to store the items for the tenant.

HOWEVER…

If you are not certain whether the tenant has abandoned the property, you should not change the locks.  If you have the keys, you could enter the premises, but KNOCK FIRST.  Whether or not the tenant has abandoned is often a judgment call, looking at a combination of factors, such as:

  • Did the neighbors see them move?
  • Are the utilities shut off?
  • Did the tenant put in a change of address at the post office?
  • Is there any significant furniture left?
  • If you have access, are there sheets on the beds?

In some cases, the tenant has been arrested or is in the hospital, which would explain why he hasn’t been around.  Or, maybe the tenant has moved, but left behind some furniture to pick up later on.  Even if the tenant is not sleeping there, they are still “in possession” if they have their personal belongings in the unit and have not shown an intent to abandon these items.

Some states have specific laws regarding PRESUMPTIONS of abandonment.  For example, Connecticut law states:

Sec. 47a-11b. Abandonment of unit by occupants. Landlord’s remedies.
(a) For the purposes of this section, “abandonment” means the occupants have vacated the premises without notice to the landlord and do not intend to return, which intention may be evidenced by the removal by the occupants or their agent of substantially all of their possessions and personal effects from the premises and either

(1) nonpayment of rent for more than two months or
(2) an express statement by the occupants that they do not intend to occupy the premises after a specified date.

You can find a state by state guide to landlord tenant law by clicking here. If you do intend to claim abandonment, take pictures, gather evidence and cover all bases to prepare for a possible wrongful lockout claim.  If you have ANY doubts, call your landlord-tenant attorney and do the proper legal eviction proceeding.

The Landlord Protection Agency would like to thank William Bronchick for supplying the article above.

About the author…
William Bronchick, Esq. is an author and attorney who regularly presents workshops and do-it-yourself seminars at real estate and landlord associations around the country. He is the president and co-founder of the Colorado Association of Real Estate Investors. Bill specializes in all forms of asset protection and is the author of several great home study courses.

Read more articles by William Bronchick at Legalwiz.com.

Source: The Landlord Protection Agency, Inc.

Southwest Wake County’s growth spike shows it’s no longer a bedroom community

What used to be a mere cluster of Triangle-outskirt towns is now one of North Carolina’s centers for economic growth. Even by Triangle region standards, which have been significant, Southwest Wake County’s growth has spiked over the last two decades.

The Census Bureau recently reported growth rateCaptures of approximately 26 percent in Apex, 35 percent in Holly Springs, and 44 percent in Fuquay-Varina, outpacing Raleigh in 2016. Residential growth in Holly Spring

 

s alone is expected to grow so rapidly that for every three residents today, there will be five by 2025.

As a site selection specialist and a local resident, I have seen the impact this has had on the workforce. Joanna Helms, Apex Economic Development Director shared, “Most people don’t realize that Apex has over 50 thriving companies that range from advanced manufacturing, wholesale distribution and precision machining to information technology, computer gaming and software development, as well as micro brewing.”

 

Following the population growth, retail market vacancies have been competitive, and are currently at 2.8 percent according to CoStar. It seems that almost every week, another grocer, restaurant, or other retailer announces an opening. As of November 2017, Southwest Wake had almost 30,000 square feet of retail space under construction, as well as five shopping centers proposed. Current mixed-use developments in Holly Springs and Fuquay-Varina create tremendous retail and mixed-use opportunities for business owners and consumers alike.

While retail development will always follow the rooftops and urban areas continue to thrive and grow, a new trend is emerging where many companies are migrating closer to their workforce. This has not only reduced geographic and traffic concerns during the recruiting process, but has also developed a quality of life for employees that, in turn, improves the quality of the company. Names such as Dell Inc., Rovisys, and Sequirus are located in the heart of Southwest Wake, producing thousands of jobs and catalyst for economic growth.

 

“Town leaders have strategically positioned the assets of the community to attract more life science companies. Highlights include: more than $100 million has been invested in roads, water and sewer projects and parks and recreation facilities in the last 10 years,’ said Holly Springs Economic Development Director, Irena Krstanovic.

Southwest Wake currently has over 75,000 square feet of industrial and flex space under construction. These properties are in addition to almost one million square feet of proposed development. Local municipalities are looking to grow their commercial tax base, as well as offer incentives for businesses to join their communities.

This, along with land availability, provides development opportunities for any

 

thing from spec space to owner-occupancy. Additionally, the construction of “Complete 540” project going through the southwest, there will soon be expedited access to RDU and other parts of the region. According to Economic Development Director, Jim Seymour, “Fuquay-Varina continues to see strong growth in the expansion of our medium to large manufacturing firms. Our geographical location is one of our community’s greatest assets for manufacturing and distribution.”

Source: https://www.bizjournals.com/triangle/news/2017/12/12/southwest-wake-county-s-growth-spike-shows-it-s-no.html